Monitor This Key Price Level for First Solar Shares

First Solar (FSLR) is set to capture the attention of investors as the solar panel maker’s shares broke out from a crucial chart pattern on Friday. The move came after a soft April jobs report sparked hopes of earlier-than-expected interest rate cuts, potentially reigniting consumer interest in the solar sector. Lower borrowing costs resulting from interest rate cuts make solar energy product installations more affordable, which could boost demand across a wider customer base.

Positive Earnings and Revenue Growth

First Solar, based in Tempe, Arizona, also allayed concerns about slowing domestic demand within the industry by posting better-than-expected quarterly earnings and revenue. The company reported a 450% increase in earnings and a 45% increase in revenue compared to the same quarter last year. This positive performance suggests that a sector recovery may be on the horizon sooner than anticipated. In contrast, rival Enphase Energy (ENPH) recently missed Wall Street expectations, citing softening U.S. demand and an inventory glut in Europe.

Additionally, First Solar stands to benefit from the data center boom as tech giants seek carbon-free energy solutions to power their expanding artificial intelligence (AI) infrastructure. Microsoft (MSFT) recently announced plans to invest over $10 billion in developing renewable energy capacity to support its data centers. This move aligns with Microsoft’s commitment to match all its electricity consumption with zero-carbon energy purchases by the end of the decade.

Key Level to Watch Following Pennant Breakout

First Solar shares broke out from a three-week pennant chart pattern on Friday, signaling a continuation of the uptrend that began in mid-March. The stock price rose 6.1% to close the week at $191.55 on increased volume. Moreover, the 50-day moving average recently crossed above the 200-day moving average, generating a bullish golden cross buy signal. Investors should closely monitor the $220 level, where the price may encounter selling pressure from a horizontal line connecting previous swing highs between March and July last year.

Key Takeaways

• First Solar shares broke out from a pennant chart pattern on Friday following a soft April jobs report that fueled hopes of interest rate cuts.
• Lower borrowing costs resulting from interest rate cuts make solar energy product installations more affordable for customers.
• Investors should keep a close eye on the $220 level, where the stock price may face selling pressure.

Investors are advised to stay informed about developments in the solar sector and monitor key price levels for First Solar shares to make informed investment decisions. The recent breakout from a chart pattern and positive earnings growth indicate potential opportunities for investors interested in the renewable energy space.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more information. As of the date this article was written, the author does not own any of the above securities.

For more insights and updates on First Solar and other investment opportunities, visit Investopedia.